Financial Services Advisor 2023-02-08 – Inter-American Dialogue

LATIN AMERICA ADVISOR

Financial AMERICA ADVISOR

A daily publication Of the dialogue

February 7, 2023

How Much Growth Can Latin American Fintechs Sustain?

Latin American financial technology start-ups have experienced strong growth in recent years. But higher interest rates are posing a headwind to the sector. // File Photo: Nathan Dumlao via Unsplash.com.

Q

JPMorgan Chase and the World Bank’s International Finance Corporation are leading a $27 million investment round for Colombia-based KLYM, a financial technology start-up that provides working capital to small- and medium-sized companies in Latin America, Bloomberg News reported Jan. 19. Latin America’s fintech sector more than doubled in size between 2018 and 2021, the Inter-American Development Bank said last year. How much growth can the fintech sector expect this year in Latin America and the Caribbean? To what extent are higher interest rates hampering the sector’s growth? What role are government policies playing in the sector’s expansion in the region to reach underserved companies and excluded populations from gaining access to financial services?

A

Ray Ruga, CEO of Fintech Americas: “After some furious growth, the fintech sector in Latin America is taking a globally induced macroeconomic breather. This is not unique to the region; the whole world is experiencing a post-Covid slowdown driven by a mix of higher interest rates, inflation and political instability. However, I believe this to be only a temporary hiatus. As a region of 669 million people, with 70 percent estimated to be unbanked, and with nearly 60 percent of point sales transactions still being in cash, there remains too much opportunity for disruption. The financial services sector has been in a steady state of transformation throughout the region, a trend that was…”

Top News

Mexico Earnings Fuel Record Profit at Spain’s BBVA

Spanish bank BBVA on Feb. 1 reported a 38 percent rise in net profit to a record 6.42 billion euros ($6.98 billion). Strong performance in the bank’s Mexico unit helped to fuel profits, BBVA said.

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Moody’s Lowers Outlook for Five Peruvian Financial Institutions

Moody’s Investors Service said Feb. 2 that it was maintaining its ratings but lowering its outlook for five Peruvian financial institutions over social and political risks.

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U.S. Lawmaker Proposes Tax on Remittances for Border Security

U.S. Rep. Nathaniel Moran (R-Tex.) on Jan. 31 introduced legislation to impose a tax on remittances sent to some countries in order to fund border security. // File Photo:
Moran // File Photo: Facebook Page of Rep. Nathaniel Moran.

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ABOUT THE financial services ADVISOR

Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.